KARACHI, April 14: The cotton market on Monday reopened on a higher note as leading spinners indulged in big-lot business on the perception that post-Iraq war export scenario could undergo a major change.
“Foreign demand, which is on hold since the allied invasion of Iraq, is expected to manifest itself in a big way during the next couple of weeks,” dealers said. “They made forward buying at the current rates to remain competitive on the world markets.”
Most of the fine lots including those billed as contamination-free were again sold around Rs2,600 per maund Rs75 above the official spot rates.
In identical developments, the local yarn prices, which have suffered modest decline owing to some problems on the export front are also expected sympathetic increase during the next couple of sessions.
“But I doubt spinners will buy above Rs2,600 per maund for export parity reasons,” says a leading broker. “But some others say much will depend on the post-Iraq war behaviour of the world markets and supply and demand factors.”
However, the big-lot business reflects that leading spinners are out to grab the floating stocks fearing a price flare-up in the backdrop of falling unsold stocks with the ginners.
According to leading ginners the unsold stock lint lying with them could be disposed of by the middle of the next month, although there may some holding back to get further higher prices.
Meanwhile, information leaking from the textile industry sources indicates they had already signed forward deals with some foreign suppliers for over a million bales of lint to make up the shortage of local crop and consignments are steadily arriving here.
But in any case they need another half a million bales before the new crop from the lower Sindh ginneries makes debut on the market.
New crop from the lower Sindh ginneries is expected to reach the market by the end of July or early August, although forward trading in it will resume sometime in June for forward delivery.
Official spot rates remained pegged at the last close of Rs2,525 per maund, while in the ready section most of the deals were done well above them.
Ready offtake was modest about 8,000 bales, all from the Punjab ginneries, the following being some of the notable deals: 3,700 bales, Bahawalpur at Rs2,600, 2,500 bales, Khanpur also at the same rate and 400 bales, Zahirpir at Rs2,575.
